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Shkiper50 [21]
1 year ago
12

You are the CFO of Designer Brands and expect your firm to generate FCFs of $550,000 per year (starting next year) for 10 years.

After that, annual FCFs will grow by 1% per year forever. Therefore, FCF in year 11 would be higher than FCF in year 10, FCF in year 12 would be higher than year 11, and so on. You expect a cost of capital of 4% for Designer Brands. How much would you value Designer Brands
Business
1 answer:
Lemur [1.5K]1 year ago
3 0

I would value the Designer Brand as $16,970,189.21.

<h3>What is the value of the designer brand?</h3>

The value of the designer brand can be determined using the two-stage FCF growth model.

FCF each year from year 1 to 10 = $550,000

FCF from year 11 = ($550,000 x 1.01) / (0.04 - 0.01) = $18,516,666.67

The present value of the FCF would be determined next:

($550,000 / 1.04) + ($550,000 / 1.04^2) + ($550,000 / 1.04^3) + ($550,000 / 1.04^4) + ($550,000 / 1.04^5) + ($550,000 / 1.04^6) + ($550,000 / 1.04^7) + ($550,000 / 1.04^8) + ($550,000 / 1.04^9) + ($550,000 / 1.04^10) + ( $18,516,666.67 / 1.04^10) = $16,970,189.21

To learn more about FCF, please check: brainly.com/question/8058024

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gladu [14]

Answer: 30 days

Explanation: Cash cycle refers to the amount of time it takes for a business from paying cash to its suppliers for raw materials and receiving cash from its customers fro the sales made.

Hence from the above we can say that :-

decrease in inventory will decrease the cycle.

Decrease in receivables will decrease the cycle.

decrease in payables will increase the cycle.

Thus,

cash cycle =  31 days - 2 days + 4 days - 3 days

                  = 30 days

6 0
3 years ago
Bighorn sheep are beautiful wild animals found throughout the western United States. Let x be the age of a bighorn sheep (in yea
sladkih [1.3K]

Answer:

Answer for the question:

Bighorn sheep are beautiful wild animals found throughout the western United States. Let x be the age of a bighorn sheep (in years), and let y be the mortality rate (percent that die) for this age group. For example, x = 1, y = 14 means that 14% of the bighorn sheep between 1 and 2 years old died. A random sample of Arizona bighorn sheep gave the following information:x 1 2 3 4 5y 14 18.9 14.4 19.6 20.0 (a) Draw a scatter diagram. (3 points)(b) Find the equation of the least-squares line, and plot the line on the scatter diagram of part (a). (3 points)(c) Find the correlation coefficient r. Find the coefficient of determination . What percentage of variation in y is explained by the variation in x and the least squares model? (4 points)

is given in the attachment.

Explanation:

5 0
3 years ago
The per-unit standards for direct materials are 2 pounds at $5 per pound. Last month, 11,200 pounds of direct materials that act
Ksivusya [100]

Answer:

$4,000 favorable

Explanation:

The computation of the material quantity variance is shown below:

= Standard Price × (Standard Quantity - Actual Quantity)

= $5 × (2 pounds × 6,000 units - 11,200 pounds)

= $5 × (12,000 pounds - 11,200 pounds)

= $5 × 800

= $4,000 favorable

Simply we deduct the actual quantity from the standard quantity and the difference is multiplied with the standard price so that the correct variance can be computed

5 0
3 years ago
The project indirect costs associated with a project include overhead, facilities, and resource opportunity costs. Group of answ
Levart [38]

Answer:

True.

Explanation:

Indirect cost are cost incurred in the production process that cannot be traced directly back to the product, but contributes to the production process in general. For example the salary of wages is not a cost that is directly included in the product itself, but workers are needed to perform tasks and operate the machines that produce the product.

Direct cost are traceable directly to the product and include raw material.

So overhead, facilities and resource opportunity cost are all indirect cost in producing the product.

8 0
3 years ago
Suppose that gasoline prices increase dramatically this month. Lola commutes 100 miles to work each weekday. Over the next few m
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Answer:

The correct answer is option d.

Explanation:

Gasoline prices increase dramatically in a month. Lola commutes 100 miles to work each weekday.  

For a few months, she tries to reduce expenses on gasoline but driving less on weekends. Within a year she moved to place only 10 miles away from her workplace.  

We see that in response to an increase in the price of Gasoline, the quantity demanded of gasoline by Lola is adjusting over time. The demand is getting more price elastic with the passage of time as a consumer is adjusting to price change and finding new ways to reduce expenses.  

This example shows how the time horizon determines the price elasticity of demand.

5 0
2 years ago
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